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Multi-tier Loyalty Programs to Stimulate Customer Engagement

  • Tammo H. A. Bijmolt
  • Manfred Krafft
  • F. Javier Sese
  • Vijay Viswanathan
Chapter

Abstract

Customers differ in their purchase behavior, profitability, attitude toward the firm, and so on. These differences between customers have led to numerous firms introducing multi-tier loyalty programs. A multi-tier loyalty program explicitly distinguishes between customers by means of hierarchical tiers (e.g. Silver, Gold, Platinum) and assigns customers to different tiers based on their past purchase behavior. Next, customers in different tiers are provided varying levels of tangible rewards and intangible benefits, which are potentially powerful instruments to stimulate customer engagement. In this chapter, we focus on the design and effectiveness of such multi-tier loyalty programs. Building on loyalty program and customer prioritization research, we discuss whether, why, and how multi-tier loyalty programs are effective (or not) in influencing customer behavior, thereby enhancing customer engagement and financial performance.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Tammo H. A. Bijmolt
    • 1
  • Manfred Krafft
    • 2
  • F. Javier Sese
    • 3
  • Vijay Viswanathan
    • 4
  1. 1.University of GroningenGroningenNetherlands
  2. 2.University of MünsterMünsterGermany
  3. 3.University of ZaragozaZaragozaSpain
  4. 4.Northwestern UniversityChicagoUSA

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